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Stock Market Valuation
Forward PEs for both developed and
emerging markets are presently less
expensive than large US stocks, but
neither developed nor emerging
market stocks are cheaply valued
when compared to their historical
averages. The investment
environment has elevated developed
and emerging market valuations
since 2022. The valuation gap
between these two asset classes had
narrowed somewhat in recent years,
but it has widened again recently.
International stocks still look
attractive as critical diversifiers while
US stocks deal with a growth scare
amid higher large cap valuations.
International equities are benefiting
from looser fiscal and monetary
conditions in many countries and
lower valuations than the S&P 500,
too.
Source: Bloomberg; Envestnet Quantitative Research Group (QRG).
0
5
10
15
20
25
9/2010 9/2015 9/2020 9/2025
MSCI EAFE (Developed Markets)
MSCI Emerging Markets
MSCI EAFE Historical Average
MSCI EM Historical Average
MSCI EAFE
15-Year
Historical
Average
14.3x
MSCI EM
15-Year
Historical
Average
11.9x
20251003-4872948
